Companies can learn valuable lessons from the way they deal with economic uncertainty, such as the effects of Covid-19 and, more recently, a turbulent economy.
Some companies will see an opportunity to save money by reducing their marketing budget when the economy starts to look a bit rocky. However, history shows that businesses who have the foresight to invest in their brand and marketing are more likely to emerge stronger after tough times. While some cuts, or changes of budget may be necessary, the value of maintaining investment in marketing has been repeatedly demonstrated.
Marketing During Uncertainty: Some Examples
Brands that continue to invest in marketing budgets during a recession can see tremendous long-term success. For example, during the Great Depression in America, cereal brand ‘Post’ made major marketing cuts. Kellogg’s, on the other hand, doubled its advertising budget, primarily through radio ads, to promote Rice Krispies, at the time their newest cereal. This led to a 30% increase in profits for the company, and, by the end of the Great Depression, Kellogg’s had firmly established itself as the dominant player in the American cereal industry. (https://www.newyorker.com/magazine/2009/04/20/hanging-tough)
More recently, Groupon’s strategy in the 2008 financial crisis led to a $500 million profit. This was because, while consumers were cutting their non-essential spending, Groupon saw an opportunity to create offers for non-essentials such as travel, entertainment and retail. They heavily increased their email marketing budget, capitalising on the fact that people were trying to make their money go further.
Socio-Economic Turbulence: Marketing During Covid-19
Covid-19 affected all of us, but one of the hardest hit industries was hospitality and catering. Many hospitality and catering businesses had to shift their entire business model away from dine-in to takeaway. A drastic change that involved adapting menus, sourcing packaging, retraining staff and possibly offering a whole new delivery service.
Of course, all this was no good unless their potential customers knew about it, so they had to get this information out into the world via marketing. This often began with their websites, social media channels, paid ads, print, sandwich boards and leading many to invest in digital marketing for even greater reach.
Like this example, turbulent times can push businesses into action, leading them to uncover new opportunities and better ways of doing things. The businesses that do this maintain a relationship with existing customers and probably pick up some new ones too.
Why Should we Invest in Digital Marketing in times of Economic Uncertainty?
In the last decade or so, there has been a gradual shift away from traditional media such as print, TV and radio advertising in favour of digital marketing, as you will see results more quickly, plus it is agile and trackable.
Invest in digital marketing when things look rough, it’s a great strategic move for several reasons:
Increased Online Presence
Economic uncertainty drives both B2B and B2C consumers to shop around for more cost-effective and convenient shopping options, with the internet as their primary source of information. By growing and enhancing your digital presence, you can reach this shifting audience.
Invest in digital marketing to maintain visibility and continue to grow your potential client base. This keeps your business in the minds of consumers, positioning you well for when the economy recovers.
Cost-Effective and Agile Marketing
One of the quickest and most flexible forms of marketing is digital advertising, in particular PPC (Pay Per Click) or social advertising. Both of these facilitate highly targeted campaigns, ensuring that your marketing budget is spent efficiently by reaching the right audience. Digital channels provide detailed analytics, so they can be easily and quickly scaled up or down based on real-time results, budget constraints and business needs without significant additional costs.
Competitive Advantage
During tough times, some competitors may reduce their marketing spend. This provides an opportunity for you to capture a larger market share with less competition if you invest in digital marketing. You can be agile, shifting your strategy around any business changes, quickly adapting to market changes and shifts in consumer behaviour.
Consumer Trust and Loyalty
Invest in digital marketing to foster engagement with customers through social media, email marketing, and content marketing, which work to build trust and loyalty. Customer loyalty is incredibly valuable, the cost of acquiring a new customer can be as much as five times higher than retaining an existing one. (https://www.forbes.com/sites/forbesbusinesscouncil/2022/12/12/customer-retention-versus-customer-acquisition/)
Long-Term Strategies
Invest in digital marketing consistently to help to build a strong brand identity, which is crucial for long-term growth and stability. Digital marketing strategies such as content marketing, SEO, and email marketing help to generate and nurture leads, ensuring a steady pipeline of potential customers.
SEO (Search Engine Optimisation) and content marketing go hand in hand, they are very important long-term strategies to make your website rank for key search terms. When you get this right, it can provide you with an on-going stream of leads with minimal input.
Access to a Wider Market
Invest in digital marketing to break geographical barriers, allowing you to reach a much wider audience, including some that you might not anticipate. This can be particularly beneficial if local markets are in some way limited.
Conclusion
This year, both the UK and global economy remain uncertain, which means businesses need to be flexible and tactical in how they use their budget. When it comes to marketing, the effectiveness of digital marketing is far quicker and easier to measure than traditional media, allowing you to react by shifting time, effort and funds away from what doesn’t work well for you, to something that does.
Investing in digital marketing should be a part of every business strategy. Investment during economic uncertainty can provide a competitive edge, ensure efficient use of marketing budgets, and position your business for long-term success. By using digital channels effectively, businesses can maintain visibility, engage with customers, and adapt quickly to changing market conditions, ultimately turning economic challenges into opportunities.
Do you need help with your digital marketing strategy? Whether you are looking for a long-term SEO partner, or some quicker wins via a targeted PPC Campaign, we can help.